The document discusses supply chain management and logistics. It defines key terms like supply chain management, logistics, and the differences between the two. It also outlines the major activities in the logistics cycle including forecasting, procurement, inventory management, and key forms and records used like stock control cards and daily activity registers. Ordering processes, receiving, storage conditions and key performance indicators are also summarized.

1. Supply Chain Management
Presenter
Mr. Jones H.M -MBA

2. OVERVIEW OF SUPPLY CHAIN
MANAGEMENT
•
•
Prior to the 1980s, business firms were
using terms such as, “logistics”, and
“operations management” instead of
supply Chain Management.
The term was coined by a British
logistician and consultant by the name of,
Keith Oliver in the 1980s.

3. OVERVIEW OF SUPPLY CHAIN
MANAGEMENT
•
•
The term was first used in public in an
interview with Arnold Kransdorff of the
Financial Times on 4 June 1982
The term Supply Chain Management came
into widespread use in the 1990s

4. OVERVIEW OF SUPPLY CHAIN
MANAGEMENT
•
•
Continuous evolution of the supply chain
and of the techniques to manage it
effectively were motivated by the
following:
Fierce competition in today’s global
markets,
Introduction of products with shorter life
cycles

5. OVERVIEW OF SUPPLY CHAIN
MANAGEMENT
•
•
•
The heightened expectations of
customers,
New rules of competition and the
downward pressure on prices,
Continuing advances in communications
and transportation technologies (e.g.,
mobile communication, Internet, and
overnight delivery),

6. OVERVIEW OF SUPPLY CHAIN
MANAGEMENT
• Supply chain management builds upon the
concept of logistics and seeks to achieve
linkage and coordination between the
processes of other entities in the pipeline
( suppliers and customers).

7. •
According to the council of Supply Chain
Management Professionals ( CSCMP,2011)
“Supply Chain Management encompasses
the planning and management of all
activities involved in sourcing,
procurement ,and all logistics
management activities
Definition of Supply Chain
Management

8. Definition of Logistics
The CSCMPP also define Logistics – “The
part of supply chain management that
plans ,implements, and controls the
efficient ,effective forward and reverse
flow and storage of goods ,services and
related information between the point of
origin and point of consumption in order
to meet customers requirements...

9. Definition of Logistics
• Logistics management is an integrating
function ,which coordinates and optimizes
all logistics activities, as well as integrates
logistics activities with other functions
including marketing , sales, manufacturing ,
finance, and information technology”

10. Comparison of logistics and supply
chain management:
•
•
Logistics typically refers to activities that
occur within the boundaries of a single
organization such as procurement,
distribution, storage, and inventory
management.
Supply Chain Management (SCM)
acknowledges all of traditional logistics and
also includes activities such as marketing,
new product development, finance, and
customer service.

11. Comparison of logistics and supply
chain management:
BASIS FOR
COMPARISON
LOGISTICS SUPPLY CHAIN
MANAGEMENT
Objective Customer satisfaction;
to ensure the six rights
right product
with the right quality
In the right quantity
at the right time in
the right place at the
right price to the ultimate
customer)
Competitive advantage
How Many Organisations
are involved
One Multiple
Evolution A long time ago Modern concept

12. Purpose of Logistics
•
•
•
•
•
•
The purpose of a logistics system is to
ensure the six rights:
The right drugs and medical supplies
in the right quantities
in the right condition
are delivered to the right place
at the right time
for the right price.

13. The logistics cycle
Policy/ legal
Frame work
adaptability
SERVING CUSTOMER
PRODUCT
SELECTION
FORECASTING AND
PROCUREMENT
INVENTORY
MANGEMEN
T
Logistics
management
information system
Organization and
staffing, financing and
budgeting,
supervision
evaluation

14.
Major Activities of the Logistics
Cycle
•
•
Serving Customers:Everyone working in
logistics must remember that their job is to
select, procure, store, or distribute products
to meet customer needs
Product selection: In a health logistics
system, a national formulary and
therapeutics committee, pharmaceutical
board, board of physicians, or other
government-appointed group select
products to meet the needs of patients.

15. Major Activities of the Logistics
Cycle
• Quantification :After products are selected,
managers must determine the quantity
needed for each product, for a specific time
period—this is called quantification.
Quantification depends on accurate
forecasting
Procurement: Procurement plans are based
on requirements estimates that are
determined mathematically for each
product.

16. Major Activities of the Logistics
Cycle
• Inventory management: A program’s
inventory control strategy specifies how
much stock to store and where to store it.
Enough stock should be available to meet
customer needs until a new order is
received; but not so much that stocks
expire or are wasted or that you exceed
storage capacity.

17. Major Activities of the Logistics
Cycle
• Quality monitoring:Quality monitoring
appears between each activity of the
logistics cycle and ensures that the quality
of all the activities in the cycle are
monitored. Management Information
Systems: Information drives the logistics
cycle; without it, the logistics system
cannot run smoothly. Managers gather
information about each activity in the
system and then analyze that information
to make decisions.

18. Major Activities of the Logistics
Cycle
Organization and Staffing:A logistics system
can only work when the staff are well-
trained and operate in a supportive
environment. They must have the right tools
to do their jobs, whether they place orders,
coordinate shipments, oversee deliveries, or
keep a warehouse functioning effectively to
ensure that the right product, in the right
quantity, is shipped to the client.

19. Major Activities of the Logistics
Cycle
Organization and Staffing:A logistics system
can only work when the staff are well-
trained and operate in a supportive
environment. They must have the right tools
to do their jobs, whether they place orders,
coordinate shipments, oversee deliveries, or
keep a warehouse functioning effectively to
ensure that the right product, in the right
quantity, is shipped to the client.

20. Major Activities of the Logistics
Cycle
• Supervision:If the logistics system is
carefully watched, it will run smoothly and
staff will anticipate any needed changes.
The effective supervision of logistics
activities minimizes problems and/or
resolves them quickly before any one
problem becomes a crisis.

21. Major Activities of the Logistics
Cycle
• Budgeting : affects the product selection,
quantity of products procured, amount of
storage space available, transport, and
number of staff working in logistics. To
have the entire system operating
effectively, logistics activities must be
included in operational planning and
receive sufficient funds.

23. Use of standard operating
procedure manual
• The manual is intended to simplify and
standardise the work required for logistics
management in order to allow health
workers more time for client focused
activities. The manual guides health care
workers in completing the following tasks
with the help of Job aids.

24. Use of standard operating
procedure manual
•
•
•
•
•
Maintaining adequate supplies of
commodities
Reporting essential logistics data and
ordering of commodities from MSl
Receiving and storing
Recording and reporting issues
Monitoring logistics activities throughout
the system

25. Supply chain pipeline
• The pipeline includes the entire chain of
storage facilities and transportation links
that move supplies from the manufacturer
to the consumer, including port facilities,
central warehouses, regional warehouses,
district and sub district stores, service
delivery points, and transportation
vehicles.

26. Supply chain pipeline
• A supply chain consists of activities and
organisations that materials move through
on their journey from initial suppliers to
the final customer.

27. Supply chain pipeline
• A supply chain consists of activities and
organisations that materials move through
on their journey from initial suppliers to
the final customer.

28. Supply chain pipeline
• The pipeline includes the entire chain of
storage facilities and transportation links
that move supplies from the manufacturer
to the consumer, including port facilities,
central warehouses, regional warehouses,
district and sub district stores, service
delivery points, and transportation
vehicles

29. Logistics management information
system ( LMIS)
• The basic purpose of an LMIS is to collect
and report information to other levels in
the system in order to make decisions
regarding the quantity and time to
distribute drugs and medical supplies.

30. Essential logistics data
•
•
•
STOCK ON HAND: quantity of usable stock at a
particular level of the system at a particular point in
time
CONSUMPTION DATA: quantity of drugs dispensed to
clients during a particular period of time
DATA ON LOSSES AND ADJUSTMENTS : quantity of
drugs no longer available for distribution, which have not
been dispensed, but are damaged or expired are called
losses and additions and subtractions to the available
drug supply, which were not received through the normal
mechanism of receipt are called adjustments. These are
either transfers, drugs loaned to (-)/from (+) another
facility, or drugs “found” (+) as a result of a previous
miscount

31. Records and Reports used in the
management of ARV ,EMLIP and
HIV test kits logistics system
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•
•
•
•
Stock Control Card
Stock Control book
GRN
Supply voucher
Requisition form

32. Stock Keeping Records
Description Type of data
collected on the
Transaction record
Stock Control Card
Inventory Control
Card
Stores Ledger
•
•
•
Stock On Hand
Losses and
adjustments
Quantity to Order
Quantity On Order
•
•
•
•

33. Transaction Records
Description Type of data
collected on the
Transaction record
Requisition and
issue voucher
Issue voucher
Packing Slip
Delivery note
•
•
•
•
Quantity of product
being
Ordered
Shipped,
Received
•
•
•

34. Consumption Records
Description Type of data
collected on the
Transaction record
Dilly Usage Register
Log book
Tick sheet
Test Register
•
•
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•
Product used or
dispensed to the end
user at the service
delivery point

35. Forms used in managing drugs
Form name Purpose activity
Stock control card To account for drugs in
the storeroom
Issuing
Storing
Receiving
Reporting and ordering
Physical inventory
ART daily activity register To record and track the
number of ARV drugs
dispensed to patients
Dispensing
Reporting and ordering
Drug log book Collect information on
amounts of drugs
dispensed
Dispensing
Reporting and ordering
Report and requisition To provide logistics data
to MOH-LMU
To report on stock status
To order drugs
Reporting and ordering

36. Forms used in managing drugs
Form name Purpose activity
Supply voucher To request for drugs
form the health center to
the district
To request for drugs
from the ward to the
hospital pharmacy
Ordering
Receiving
Issuing
Dispatch note To account for receipts
from MSL
receiving
Report for returning
products
To track products
returned to MSL from
health facility level
storing
Dangerous drugs register To record and track the
number of dangerous
drugs dispensed to
patients
Dispensing
Reporting and ordering

37. Recording transactions in the stock
control card
•
•
•
•
Complete one SCC for each product
Enter the code, the name and form of the
drug, unit, strength ,maximum level and
the minimum level
Enter the date of the transaction
Enter the reference number

38. Recording transactions in the stock
control card
•
•
In the remarks column provide a brief
explanation for any loss or adjustment or
add any other comment.
Keep the stock control card close to were
products are being stored and issued in
the pharmacy.

39. Recording transactions in the stock
control card
•




In the issued to or received from column
enter
Balance brought forward if this is the first
line of a new stock control
Physical count if you have done a physical
count
MSL or Pharmacy in red if receiving
Loss or adjustment

40. Recording transactions in the stock
control card
•
•
•
•
In the received column enter the quantity
received
In the issued column enter the quantity
issued
In the losses and adjustment column enter
the exact amount of the loss or adjustment
In the balance column enter the calculated
balance

41. Completing the Daily activity register
for HIV Test Kits
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•
•
•
•
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•
The following steps should be followed:
Record the client number and purpose of the test
Record the type of test
Record the quantity of test used
Record the result ( R, NR or IND)
Calculate the total quantity of the tests done at
the end of the day
Summarise the total number of tests done at the
end of the month

42. Completing the Daily activity register
for ARVs
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•
•
•
•
•
The following steps should be followed:
Record the client number
Record the type of ARV dispensed
Record the quantity dispensed
Calculate the total quantity dispensed at
the end of the day
Calculate the quantity dispensed at the
end of the month

43. Ordering Drugs and Medical
supplies
•
•
•
•
A report and requisition Drugs and
Medical supplies is used (REMMS).
This form is used at the Health Centers and
Hospitals
Health centers send the REMMS to the
District for review by the fifth day following
the reporting period.
DHO and Hospitals after reviewing the
REMMS send it MSL according to schedule

44. Ordering ARVs and Test Kits
•
•
•
•
A report and requisition is used (R&R).
This form is used at the Health Centers
and Hospitals
Health centers send the R&R to the District
for review by the fifth day following the
reporting period.
DHO and Hospitals after reviewing the
R&R send it MSL according to schedule

45. Ordering ARVs and Test Kits
•
•
•
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The following data is reported on the report
section of the R&R:
Beginning Balance in the store room and
dispensary or testing site
Total Quantity Received
Total Quantity Used
Losses and adjustments
Ending Balance

46. Ordering ARVs and Test Kits
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The following data is reported on the
requisition section of the R&R:
Average Monthly Consumption
Maximum Quantity
Order Quantity

47. How to calculate the order quantity
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

Calculating the average monthly
consumption
Add the total quantity dispensed for the
current and the last two months
Divide by three
Round to the nearest dispensing unit

48. How to calculate the order quantity
•
•
Calculating the maximum quantity
Multiply the average monthly consumption
by 3
Calculating the order quantity
Subtract the ending balance from the
maximum quantity

49. Receiving drugs and medical
supplies
•
•
•
•
•
•
Locate the requisition or supply voucher
Conduct a visual inspection
Note discrepancies on the forms
Sign the form
Place and reorganize products according
to FEFO
Enter and update the goods received
note(GRN) and the stock control cards

50. Storage
•
•
The purpose of storage are as follows:
Protect the quality of the product and its
packaging
Make product available for use at the right
time

51. Storage conditions
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•
•
•
•
Put temperature control devices in place
(fan, air conditioner)
Ensure adequate ventilation (forced
ventilation)
Ensure adequate light to facilitate all work-
related activities
Store products out of direct sunlight
Store supplies not for immediate use in
their shipping cartons

52. Storage conditions
•
•
Secure Storeroom from water (check the
roof, walls, floor and windows)
Store all products on pallets at least 10cm
off the floor, 30 cm away from the walls
and other stacks, and not more than 2.5m
high

53. Storage conditions
•
•
Store chemicals & insecticides separately
to avoid contamination of drugs
Display hazardous warning signs for
chemicals and other hazardous material

54. Storage conditions
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•
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•
Limit access to authorised personnel
Ensure windows, roof, walls and doors are
well secured
Ensure that incoming & out going stock
match documentation
Verify inventory records monthly through
physical counts

55. Storage conditions
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•
Clean the store regularly (have cleaning
schedule in place)
Put pest control measures in place

56. Storage conditions
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Arrange products by expiration date (FEFO,
first-expiry, first out) or by FIFO (only for
products with no expiry date)
Arrange supplies by
–Alphabetical
–Dosage form
–Rate of stock movement
–Therapeutic grouping

57. Storage conditions
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•
•
Storage area of adequate size & adequate
sorting and packaging space
Adequate space for products requiring
refrigeration
Store expired or damaged products in a
separate area & approved disposal
procedures in place

58. Storage conditions
•
•
Secure Storeroom from water (check the
roof, walls, floor and windows)
Store all products on pallets at least 10cm
off the floor, 30 cm away from the walls
and other stacks, and not more than 2.5m
high

59. Inventory control System
•
•
A system that informs the storekeeper
how much of a commodity to order, when
to order and how to maintain appropriate
stock levels
In Zambia the type of inventory control
system used is the Max-Min inventory
control system

60. Three types of Max-Min Inventory
Control System
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•
•
There are three types of Max-Min inventory
control systems
Forced ordering
Continuous review
Standard Max-Min

61. Forced Ordering
• At the end of the review period, review all
stock levels and order enough stock to
bring stock levels up to the maximum (
ARVs)

62. Continuous Review
• Review the stock level of an item every
time an issue is made. If the stock level is
at or below the minimum level, order
enough to bring to the maximum

63. Standard Max-Min
• Review the stock level of all the items at
the end of the review period. For products
that are at or below the minimum level,
order enough to bring to the maximum.
Products above minimum are not ordered.
( essential drugs)

64. How to maintain appropriate
stocking levels
1.
2.
To maintain appropriate stocking levels, the
following need to be established:
Maximum and Minimum stock levels: (
level above which and below which stock
levels should not be allowed to exceed or
fall)
Emergency order point (level that triggers
an emergency order)

65. How to maintain appropriate
stocking levels
To maintain appropriate stocking levels, the
following need to be established:
3. Review period:( the routine interval of
time between assessments of stock level
to determine if an order should be placed)
4. Lead time:(the time between when new
stock is ordered and when it is received
and available for use

66. How to maintain appropriate
stocking levels
• 5. Safety stock (the buffer/reserve stock
kept to protect against stock-outs caused
by delayed deliveries or unexpected
demand in consumption)

67. How to maintain appropriate
stocking levels
• 5. Safety stock (the buffer/reserve stock
kept to protect against stock-outs caused
by delayed deliveries or unexpected
demand in consumption)

68. How to maintain appropriate
stocking levels
• 5. Safety stock (the buffer/reserve stock
kept to protect against stock-outs caused
by delayed deliveries or unexpected
demand in consumption)

69. Stipulated max –min stock levels of
the EMLIP hybrid
Level Maximum
Months of
stock
Minimum
Months of
stock
Emergenc
y order
Point
Hospitals
( Level 1,2
& 3
3 2 2 weeks
Health
Centres
4 3 2 weeks
DHO 1 2 weeks 2 weeks

70. Assessing stock status
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•
•
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Determine the total consumption for three
months
Calculate the average monthly consumption
Determine the current quantity of stock on
hand
Calculate the months of stock on hand
Take action if needed based on the months
of stock .

71. Deciding what action to take after
stock status has been determined
•
•
•
•
No action required if months of stock is
between 3 and 2 months
If months of stock is greater than 3 months
the facility is overstocked return some
stock to the pharmacy
If months of stock is 2 months and 2 weeks
the facility is under continue monitoring
If months of stock is less than 2 weeks you
are below emergency order point.

72. Forecasting
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•
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Forecasting is the prediction of future
demand.
It is the basis of planning and decision
making
Forecasts are rarely accurate because
they are based on assumptions and may
be affected by external factors

73. Forecasting
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•
•
Judgement Methods
Causal Methods
Time series Methods

74. Forecasting
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Forecasting techniques
Judgement Methods (Qualitative
approach):
Sales force estimates
Executive opinion
Delphi method,
Markets research

75. Forecasting
•

Forecasting techniques
Causal Methods
linear regression

76. Forecasting
•
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
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Time Series Methods ( Quantitative
approach)
Simple Moving Average
Weighted Moving Average
Exponential Smoothing
Exponential Smoothing with Trend
Trend ,cyclical, seasonal and random.

77. Quantification
• The process of estimating the total
quantities and the costs of the products
required for a specific health program, for
o future period

78. Quantification
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•
•
•
Why quantify
To Prevent Shortages of drugs
To avoid wastage
To make best use of available financial
resources
To facilitate central bulk purchases

79. Quantification
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
Quantification Methods
Consumption Method: based on record of
past consumption of individual items
Morbidity Method: based on the number of
expected attendance

80. Quantification
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•
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•
Information required for quantification :
Total consumption in a period,
Number of days the product was out of
stock
Number of days the product was available
Adjusted average consumption

81. Quantification
•
•
Process to determine quantity needed and
financial means required
It involves estimating how much of a
specific item is needed and the financial
means required

82. Placing an emergency order
•
•
•
Tick the emergency order box at the top of
the report for essential drugs and medical
supplies
Use a red pen to write emergency order
across the top of each page
Complete the REMMS for all the printed
drugs and medical supplies and send the
form to the DHO

83. Placing an emergency order
•
•
DHO WILL Review and approve the
emergency order and send it the MSL
commodity security center
When the order is ready MSL will inform
you to go and collect the emergency order.

84. Handling damaged and Expired
Products
•
•
•
Store damaged and expired products
separately from usable stock
Write Damaged or Expired stock on the
box or shelf
Record the quantity and the expiry date

85. Completing the MSL Returns
Authorisation Form
•
•
•
Write the name of your facility
Write your name, date and sign
For each product being returned ,enter the
MSL code number, description, pack size,
quantity , expiry date and explanation for
why the product is being returned

86. Completing the Report for Returning
Products
•
•
•
Write the name of your facility
Write your name, date and sign
For each product being returned ,enter the
MSL code number, description, pack size,
quantity , expiry date and explanation for
why the product is being returned

87. Monitoring and supervision
•
•
Monitoring: is the checking on a regular
basis to ensure that assigned activities
are being carried out.
It requires regular checking and recording
of activities taking place in a project or
program

88. Monitoring and supervision
• Supervision: the process of ensuring that
personnel have the knowledge and skills
required to carry out their responsibilities
effectively, and to provide immediate on
the Job training ,as needed.

89. End of presentation